The Smartphone Manufacturer Landscape – Outlook and Analysis

So what will the future hold for the landscape and manufacturers of smartphones. Looking at the manufacturers as well as developments in the mobile OS space over the last 15 months I am predicting that there will be 3 companies that will lead the industry and many niche players in between.

The Dominant Three Apple, Samsung, Nokia
Notable Players HTC, LG, ZTE, RIM
The Rest Motorola, Sony, Huawei, and many more

Apple
Apple will continue to dominate the premium segment smartphone and tablet markets. However what the future holds after the launch of the IPhone 5 is less predictable. Up until the IPhone 5 product strategy and development is still the direct outcome of Steve Jobs. The first product of the post Steve Jobs era will only hit the markets in 2013. And Apple is clearly breaking new grounds and shifting away from Steve Jobs as we can see from Tim Cook’s recent moves to pay dividends as well as the Foxconn working condition deal.
On the negative side is Apple’s self-imposed market share limit in the smartphone market by only covering the premium segment. While this is still a strong growing market globally, other players cover the mid- and low-end segments as well and are better able to penetrate developing markets. It could be the mid-tier smartphone market that Apple will look at after the IPhone 5 in the Tim Cook era. Maybe an IPhone Mini for a $250 price tag?

Samsung
With its huge portfolio and spread of segments in the smartphone and tablet markets, Samsung will continue to dominate and strengthen its position as the largest manufacturer.
The core of Samsung’s market strength will continue to be Android, followed by Windows Phone. Bada will likely cease to exist with the launch of Tizen and build up a 4th niche ecosystem.
Samsung’s position is further strengthened by the support of Google which relies on Samsung to push Android and with it the armada of Google products and monetise smartphones and tablets as an advertising platform. The Samsung-Google symbiosis is even more important to Google than it is to Samsung due to Samsung’s coverage of all market segments (premium, mid-tier, low-end) across all continents and developing markets.
That support is at the same time the biggest weakness of Samsung since it is too reliant on Google’s development and delivery roadmap of Android. This is also why Samsung will continue to support WP7 and fasten the delivery of Tizen as a 2nd (and 3rd) leg to Android and to keep pressure on Google by demonstrating that there are viable alternatives.

Nokia
Saved at last minute from the burning platform by Windows Phone! How close Nokia was from missing the last boat from the burning platform is hard to ascertain from the outside but not many companies where in a position of cash and size to manage such a turnaround. And what a 180° it was.

Early signs are looking good. The Lumia 800 and 900 got very good reviews and Windows Phone is still one of the best kept secrets in the smartphone world. With the combination of the biggest software company and the manufacturing machine of Nokia behind it a bright future seems to be ahead for WiNokia. Furthermore Nokia managed to bring the price point of WP to Android levels and thus even gaining a competitive advantage over Apple. The Nokia 808 Pureview also demonstrates what Nokia brings to the WP ecosystem, the worlds best industrial development and manufacturing standards which only Apple manages to match.
Nokia’s 2nd leg, the feature phone segment, is pretty much owned solely by Nokia at this moment. While it is a less glamorous segment feature phones will continue to be the mass market product for developing countries and those customers that will always prefer just a phone next to a tablet rather than a smartphone.

HTC

HTC will continue to deliver devices by the numbers on Android and Windows Phone. While the sales figures will continue to grow, HTC’s market share should shrink due to not having a backing of any of the ecosystems. HTC is somewhat like the 2nd child of three. Neither getting much attention nor ever being able to be in a special position like the first or lastborn.
HTC may be in a vulnerable position since they are less diversified than Samsung, don’t have a strategic ecosystem backing like Nokia and neither have the brand, size or product development of Apple.

HTC will remain the 2nd biggest Android manufacturer for the next 2 years. Even though I consider HTC a takeover candidate.

LG

Three years ago it looked like LG will be a serious competitor to Samsung. Today LG seem to have lost track of their smartphone strategy and there is no clear vision of what segment the company wants to cover. LG  keeps dabbling around with mid and high-end Android, Windows Phone and the low-end Java based segments. In none of these are they delivering a continuous stream of devices that would make it clear what the vision is.

ZTE

ZTE is the dark horse in the smartphone race. Everything seems to be an option for a company that is already the 4th biggest manufacturer of mobile phones. ZTE has announced and ambitious roadmap of self developed devices and started delivering on it. It doesn’t seem unlikely either that ZTE might acquire market share through a takeover of another player. HTC, RIM or purchasing the mobile phone arm of LG could be an option too similar to the Lenovo/ThinkPad example.

RIM

The current position of RIM is not unlike the burning platform of Nokia. But RIM is in a much weaker position than Nokia to pull itself out of the mess and catch the last boat off the platform. Nokia was lucky that at the same time they needed a new smartphone strategy, Microsoft was struggling to get traction on Windows Phone. Timing was extremely fortunate for both companies. RIM, with it’s unique OS and enterprise server proposition won’t be able to find a partner like that and more and more enterprises move away from BB for mobility services. CEO Thorsten Heins also doesn’t appear to have the same sense of urgency or seeing the need for a drastic turnaround given early indications.

RIM will continue to lose market share and actual volumes will shrink as well. While it can still rely on popularity in established enterprise markets and as a consumer device in the Middle East and Southeast Asia, RIM will not get any foothold in new markets and lose out further in the Americas and Europe.

So what does that mean for RIM? They will either follow Palm or be taken over by ZTE or WiNokia and survive in a very different shape than what they are today.

Sony, Huawei, Motorola, Pantech, Acer, etc.

There will be a significant number of niche players covering Android, Windows Phone and whatever may become of Tizen. Though none of them will dominate an ecosystem the same way the Top 3 or Notable Players do.

Sony will be a niche  player in the premium Android market and attract mainly brand loyal Sony customers.

Motorola will function as Google’s enterprise device manufacturer and continue to develop premium product segment devices only.

So what is your opinion. I would love to hear your comments.

PP

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